Gift Aid lite mooted to help smaller charities

The Government should establish a Gift Aid website for donors and introduce more regular charity audits with a lighter touch, charities have suggested.

The requests were made by charities in their submissions to the Government’s consultation on charitable tax relief. They were made public last week in a document published by the Treasury.

Other suggestions included measures to help smaller charities, such as Gift Aid umbrella groups to centralise records for local charities, and a new form of ‘Gift Aid lite’ for charities with incomes below a certain threshold.

Sector groups also proposed an advanced service in addition to HM Revenue & Customs’ Gift-Aid helpline, a media campaign to raise the profile and branding of Gift Aid, and simplification of the rules for higher-rate tax payers. There were also requests to extend Gift Aid to gift membership payments and donations to charity consortia.

Earlier this year, a group of charities including the Charity Tax Group, the NCVO, Acevo and the Charity Finance Directors’ Group called on the Government to introduce a composite Gift-Aid rate based on the proportion of each charity’s tax-paying donors (Third Sector Online, 1 October). The Treasury’s document recognised the request.

However, Helen Donoghue, director of the Charity Tax Group, was concerned that the group’s proposal might have been misunderstood. “We note that the summary suggests that the accounts-based scheme, which was advocated by most of the sector representative bodies, would result in a de-linking of Gift Aid from the tax system,” she said.

“We believe that there are other precedents, such as the VAT flat-rate scheme and the former building societies composite rate, that indicate that this would not be the case. We will be seeking clarification from the Treasury on this point.”

The Government has not yet indicated which ideas are likely to be taken forward.

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